It was established on 14 February 1975 by Queen Elizabeth II on the recommendation of the Prime Minister of Australia, Gough Whitlam, to recognise Australian citizens and other persons for achievement, meritorious service, or both.
At its establishment, the Order of Australia included three grades: companion (AC), officer (AO) and member (AM), and two divisions: civil and military.
Sir Garfield Barwick, the then chairman of the Order of Australia Council, described such people as "super-knights" and Kerr thought the prospect of finding two each year "very slim".
[3] This procedure was necessary as Prince Charles, not being an Australian citizen, would not otherwise have qualified for a substantive knighthood and would have been eligible only for an honorary award.
On 2 November 2015, Abbott's successor as prime minister, Malcolm Turnbull, announced that the categories of knight and dame in the Order of Australia would again be discontinued, although existing holders of the titles would not be affected.